Manufacturers' turnover up
New Zealand manufacturers increased their turnover on the back of an almost 14 per cent increase in domestic sales during May, the latest New Zealand Manufacturers and Exporters Association shows.
The companies surveyed also reported the first rise in staff numbers since September, albeit a modest 3 per cent rise, while exports fell slightly.
Local turnover made up 63 per cent of the $530 million of annualised sales in the month.
Association chief executive John Walley said the improvement in domestic sales and employment was positive, however the fall in exports was worrisome.
''The decline in export sales is a concern and does not look like turning around with the exchange rate shooting back up over the past month or so.'' The kiwi was today trading at US80 cents, yesterday it hit a record 64.99 euro cents as well.
''It must be remembered that exporters haven't seen any sustained respite from a high New Zealand dollar since 2004. Not surprisingly, that was the last time we saw growth in the traded sector,'' Walley said.
Although total turnover increased 8 per cent, most manufacturers were still reserved with their confidence and the market remained their main constraint.
Although the net confidence index - 18 - was the highest it has been in more than a year, the increase was from negative-outlook companies sliding to neutral.
Performance and forecast indicators edged up and several companies said the Christchurch rebuild would give them opportunities for more business, Walley said.
Many exporters were struggling to make ends meet, Norman Ellison Carpets was one company downsizing, and threats to them need to be heeded, he said.
''With a new Reserve Bank Governor starting in September this is an ideal time to review the policy settings that lead to an overvalued currency.
Changes to the Reserve Bank Act are needed - additional prudential tools to complement the Official Cash Rate, and a wider set of targets to include export growth and employment.''
- © Fairfax NZ News